Speech by Theresa May, Lancaster House, 17 January 2017 -- A little over six months ago, the British people voted for change.  They voted to shape a brighter future for our country.  They voted to leave the European Union and embrace the world.

And they did so with their eyes open: accepting that the road ahead will be uncertain at times, but believing that it leads towards a brighter future for their children - and their grandchildren too.  And it is the job of this Government to deliver it. That means more than negotiating our new relationship with the EU. It means taking the opportunity of this great moment of national change to step back and ask ourselves what kind of country we want to be.  My answer is clear. I want this United Kingdom to emerge from this period of change stronger, fairer, more united and more outward-looking than ever before. I want us to be a secure, prosperous, tolerant country - a magnet for international talent and a home to the pioneers and innovators who will shape the world ahead. I want us to be a truly Global Britain – the best friend and neighbour to our European partners, but a country that reaches beyond the borders of Europe too. A country that goes out into the world to build relationships with old friends and new allies alike.

The global economy faces a multitude of risks in 2017, ranging from rising protectionism spearheaded by Donald Trump to a severe slowdown in China, the International Monetary Fund has warned. The Washington-based fund used an update to its economic forecasts to highlight popular antipathy towards international trade and a widening in the gap between rich and poor. It called on governments to tackle inequality by helping people find work in fast-changing jobs markets shaken up by technology and globalization.  The IMF made no changes to its October forecast for global economic growth to edge up this year after a sluggish 2016. But it upgraded its outlook for the UK economy, bringing the IMF more in line with other forecasters following signs that the British economy grew at a solid pace in the second half of 2016, despite the Brexit vote. The UK outlook for 2018 was cut, however.

Britain could suffer from having no access to the European Union’s markets after Brexit and "will not take it lying down", Philip Hammond has admitted.

The Chancellor admitted in an interview with a German magazine that the “UK we could suffer from economic damage at least in the short-term” if it is left with no access to the EU.  But he suggested that Britain could cut taxes to encourage companies to move to the UK if it were shut out from trading with the EU...The Telegraph disclosed Mrs May is preparing to set out plans for a ‘clean’ Brexit’ when she delivers her major speech at Lancaster House on Tuesday.  This would see the UK pulling out of the single market and the customs union in order to regain control of immigration and end the jurisdiction of the European Court of Justice.  A government source told The Sunday Telegrpah: “She's gone for the full works. People will know when she said 'Brexit means Brexit', she really meant it.”  The comments alarmed pro-Remain MPs. Former education secretary Nicky Morgan, who was sacked by Mrs May, said the Prime Minister should put "maximum participation" in the single market at the heart of her negotiating strategy and warned her not to do anything to damage the economy.

Persoanele fizice care vor să-şi izoleze termic locuinţa vor putea cere de la stat o sumă nerambursabilă de până la 40.000 de lei, în cadrul programului „Casa verde Plus”, se arată într-un act normativ al Ministerului Mediului, Apelor şi Pădurilor (MMAP), ce a fost publicat ieri în Monitorul Oficial. Totuşi, pentru a putea beneficia efectiv de bani, cetăţenii trebuie să aştepte stabilirea sesiunii de înscriere.  Regulile pentru participarea în programul denumit, pe scurt, „Casa verde Plus” sunt incluse în Ordinul MMAP nr. 2.425/2016 pentru aprobarea Ghidului de finanţare a Programului privind efectuarea de lucrări destinate eficienţei energetice, beneficiari persoane fizice. Acesta a fost publicat astăzi în Monitorul Oficial, Partea I, nr. 34 şi se aplică deja. Însă înscrierea cetăţenilor va fi posibilă abia după ce autorităţile vor stabili o perioadă anume în acest sens.

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Prin intermediul programului „Casa verde Plus”, statul vrea să încurajeze folosirea materialelor izolatoare organic-naturale pentru a reduce consumul energetic al clădirilor, cu scopul de a îmbunătăţi calitatea mediului. Banii nerambursabili vor fi acordaţi persoanelor fizice atât pentru casele aflate în construire, cât şi pentru cele deja existente, însă, aşa cum reiese din actul normativ, numai dacă acestea au cel mult parter şi două etaje.  Concret, persoanele fizice vor putea cere o sumă de până la 40.000 de lei (dar nu mai mult de 120 de lei pe metru pătrat izolat şi finisat), care va fi acordată sub forma unei prime de eficienţă energetică. „Finanţarea se acordă sub forma unei prime de eficienţă energetică în valoare de maximum 40.000 de lei, aferentă cheltuielilor eligibile, dar nu mai mult de 120 lei/mp izolat şi finisat, pentru izolarea locuinţelor aflate în faza de construcţie şi pentru izolarea locuinţelor existente”, scrie în ordinul recent publicat, citat de avocatnet.ro.

Germany - Inflation rage is coming to the boil in Germany. Leaders of the country's prestigious institutes warn that the economy is hitting capacity constraints and risks spiraling into a destructive boom-bust cycle.  In a series of interviews with The Telegraph they said that the ultra-loose monetary policy of the European Central Bank is now badly out of alignment with German needs. It has begun to threaten lasting damage, and is fast undermining political consent for monetary union.  "The ECB wants to inflate away the debt of the southern European countries. This is a clear conflict of interest with net creditors like Germany," said Clemens Fuest, president of the IFO Institute in Munich....Governments in the rich world are now the biggest debtors globally, piling up debts even as financial firms, other businesses and households moderate their borrowing. Total global debts have hit a new record high, driven largely by government borrowing, according to the Institute of International Finance (IIF). The organisation is warning that the borrowing spree comes at a dangerous time, as debts increase sharply as the era of low interest rates comes to an end, leading to substantially higher borrowing costs....Total global debts rose to more than $217 trillion (£175 trillion) at the end of the third quarter last year, the IIF said, amounting to a record high of more than 325pc of GDP.

 

LONDON - Three of the City’s most powerful figures face a grilling from MPs over suggestions banks and other financial services firms exaggerated the threat posed by Brexit. Douglas Flint, chairman of HSBC, London Stock Exchange boss Xavier Rolet, and Elizabeth Corley, vice chairman asset manager Allianz Global Investors, will appear before the Treasury Select Committee (TSC) on Tuesday.  The influential panel of MPs has launched an inquiry into the future of Britain’s economic relationship with Europe once it leaves the EU. It is understood MPs’ will investigate whether City firms have embellished the likely impact of Brexit on the Square Mile, in an attempt to pressure the government into prioritising the financial services industry during negotiations with Brussels....It comes after the chief economist of the Bank of England conceded last week that the warnings of an economic downturn forecasters sounded before the EU referendum had been a “Michael Fish” moment - the infamous episode in 1987 when the BBC weatherman said there would be no hurricane the night before the Great Storm.

The surge in public borrowing has several important effects, exposing governments to higher interest rates as well as constraining their options at a time when economists would like extra fiscal stimulus from some countries.

“Higher borrowing costs could raise concerns about debt sustainability,” warned the IIF. “With the focus in 2017 likely to be on prospects for fiscal stimulus, already-high levels of mature market debt may act as a constraint.”. Borrowers in Britain have been working hard to pay down their debts, slashing the total debt to GDP ratio by 65 percentage points between 2011 and 2015. That is now in reverse, as the government keeps borrowing and banks stop deleveraging – in the first nine months of the year, debts rose by 15 percentage points to more than 465pc of GDP. Governments in emerging markets have increased their debt more slowly – debt to GDP increased by only two percentage points. Those nations could be particularly hit by higher interest rates in the US, however, as investors looking for yield in riskier markets may be tempted back to the States, as they were in the so-called taper tantrum of 2012.  The biggest emerging market borrower in 2016 was China – it accounted for $710bn of the total $855bn of bond issuance from the governments.

The country’s households were also keen borrowers in the nine-month period. Individuals took on loans amounting to an additional 3pc of GDP, while overall emerging market household debt hit a new high of 35pc of GDP.
“This suggests that for some households, debt service capacity could be challenged in a rising interest rate environment,” the IIF warned.

Good on Andy Haldane, the chief economist of the Bank of England, for telling it as it is. In an explosive intervention, Haldane has just compared the financial crisis and Brexit to the Bank of England’s Michael Fish moments. He was referring, of course, to the day just before the greatest storm for 300 years hit Britain on Oct 15, 1987, when the famous weather forecaster got it spectacularly wrong. “Earlier on today, apparently, a woman rang the BBC and said she heard there was a hurricane on the way… well, if you’re watching, don’t worry, there isn’t!” he said.  In the case of the Great Recession, the analogy is perfect. In the case of Brexit, the error was a reverse Michael Fish, another case of the Y2K millennium bug: a prediction of immediate disaster which failed to materialise. The Bank expected a hurricane but none came, as it was put to Haldane (it’s a “fair cop”, he replied).

Wages in the US grew at their fastest pace since 2009 last month, pointing to continued momentum in the labour market and putting the country on course for a string of interest rate rises this year. Average hourly earnings increased by 2.9pc compared with the year before, the largest annual increase in more than seven years, while 156,000 jobs were created in December. Although the employment figure fell short of the 178,000 widely expected by economists, it was enough to suggest that the economy is steaming ahead.  The unemployment rate ticked up to 4.7pc in December, from a nine-year low of 4.6pc in November, as more people entered the labour market, in a sign of confidence in the economic recovery. Over the course of 2016, more than two million jobs were created in the US.  This set of jobs data will be the last for President Obama, as he makes way for Donald Trump, who is set to take office later this month.  President elect Trump has pledged to increase spending on the country's infrastructure, cut taxes and reduce red tape, three measures widely expected to boost growth this year.  The US jobs market is expected to hit full employment this year, and the country's central bank, the Federal Reserve, is set to push through interest rate rises in response.  Last month, the Fed increased the benchmark rate by .25 percentage points to a range of 0.25pc to 0.50pc. A further three rate increases are forecast for this year.  Kully Samra, managing director of Charles Schwab in the UK, said that despite December’s numbers missing forecasts, the US economy still had a robust labour market.

The US vice-president, Joe Biden, has said it is “absolutely mindless” for Donald Trump not to have confidence in the intelligence community, as the heads of the US agencies prepared to present their findings on Russian election interference to the president-elect.  The unprecedented dispute between Trump and the intelligence services he will soon control broke into the open at a congressional hearing on Thursday as the head of US intelligence publicly defended his analysts, who he said “stand more resolutely” than ever behind their conclusion of “Russian interference in our electoral process”.  Former Indiana lawmaker and member of the Senate intelligence committee has been banned from entering Russia: ‘I’m not a big fan of Putin’  Biden said it would be legitimate to question intelligence and ask for more detail or disagree but “dangerous” to publicly criticise the agencies and claim to know more than them.  “For a president not to have confidence in, not to be prepared to listen to, the myriad intelligence agencies, from defence intelligence to the CIA, is absolutely mindless,” he said in an interview with PBS.  “The idea that you may know more than the intelligence community knows – it’s like saying I know more about physics than my professor. I didn’t read the book, I just know I know more.”

The Bank of England’s chief economist has admitted his profession is in crisis having failed to foresee the 2008 financial crash and having misjudged the impact of the Brexit vote.  Andrew Haldane, said it was “a fair cop” referring to a series of forecasting errors before and after the financial crash which had brought the profession’s reputation into question.  Blaming the failure of economic models to cope with “irrational behaviour” in the modern era, the economist said the profession needed to adapt to regain the trust of the public and politicians.... Haldane described the collapse of Lehman Brothers as the economics profession’s “Michael Fish moment” (a reference to when the BBC weather forecaster predicted in 1987 that the UK would avoid a hurricane that went on to devastate large parts of southern England). Speaking at the Institute for Government in central London, Haldane said meteorological forecasting had improved markedly following that embarrassing mistake and that the economics profession could follow in its footsteps.  The bank has come under intense criticism for predicting a dramatic slowdown in the UK’s fortunes in the event of a vote for Brexit only for the economy to bounce back strongly and remain one of the best performing in the developed world.  Haldane is known to be concerned about mounting criticism of experts and the potential for Threadneedle Street’s forecasts to be dismissed by politicians if errors persist.  Former Tory ministers, including the former foreign secretary William Hague and the former justice secretary Michael Gove, last year attacked the Bank of England governor, Mark Carney, for predicting a dramatic slowdown in growth if the country voted to leave the EU.

Donald Trump's reflation rally will short-circuit. Rising borrowing costs will blow fuses across the world before fiscal stimulus arrives, if it in fact arrives.

By the end of 2017 it will be clear that nothing has changed for the better. Powerful deflationary forces retain an invisible grip over the global economy. Bond yields will ratchet up further and then come clattering down again – ultimately driving 10-year US yields below zero before the decade is over.  There are few ‘shovel ready’ projects for Trump’s infrastructure blitz. The headline figures are imaginary. His plan will be whittled down by Congress....The House will pass tax cuts for the rich but these are regressive, with a low fiscal multiplier. The choice of an anti-deficit Ayatollah to head the budget office implies swinging cuts to federal spending. These will hit the poor, with a high multiplier.  This Gatsby mix is mostly self-defeating...

As the old year draws to a close, there is more encouraging news on the economic front which is again quite out of kilter with the largely gloomy predictions of mainstream forecasters. According to a survey of chief financial officers by the professional services company, Deloitte, optimism among Britain’s leading companies is at an 18-month high. Business leaders are notably more upbeat about prospects than they were three months ago.  This is obviously very welcome news, but it is small thanks to a Government which seems to be doing its level best to make the costs and complexity of doing business in Britain ever more burdensome. The latest example of such wrong-headedness is in changes to the business rates system, due to come into effect next April. For some businesses, they mean an immediate increase in the tax on their properties of 42 per cent, with still worse to come in future years. Particularly badly hit will be smaller traders in London and the South East. Many face an eventual doubling or worse in their rates bill.  A significant number will be broken by the increases, and in despair close up shop. Others will find ways of passing the extra costs on to their customers, or alternatively demand rent reductions from landlords. Still more will simply take the hit to profits and invest less. Yet however they choose to absorb the impact, it’s going to do lasting damage to some of the most prosperous parts of the UK economy.

When an Italian government official tells you "the banks are turning the corner" it means that the real trouble is just beginning...Renzi wasted time and political & financial capital on importing hundreds of thousands of Africans and billeting them on unfortunate Italians.... Yes  indeed, "Whether Italy is out of the woods is a burning question" is an accurate and pithy caveat to the latest declaration that this week`s sticking plaster solution means every is now rosy for Italian banks, the Italian economy...

...and of course by inference the EU. It will be until the next crisis hits 2 or 3 weeks down the road.  This bailout will certainly help MPS in the short term, but it doesn`t offer any solution to the problems effecting larger financial institutions such as  Unibanco. As A-EP points out the tapering of bond purchases by the ECB will lead to  rising bond yields doesn't bode well for Italy and it`s banks...." The Italian state will be allowed to compensate some of 40,000 retail investors shunted into MPS bonds without understanding the risk, but these rebates will be partial, glacially-slow, and conducted on a means-tested basis.  Fabio Fois and Giuseppe Maraffino from Barclays said the rescue falls short of a “systemic solution”, arguing that funding is too thin and the MPS model cannot easily be replicated. “We estimate that the largest six Italian banks could need about €30bn in total to clean-up their balance sheets,” they said. Some analysts think it could take €50bn, or more if the next global downturn hits early. If so, this risks another messy drama a year hence in even less hospitable circumstances."

 

 Exporters demand professionalism from the future government, said Mihai Ionescu, the president of the National Association of Romanian Exporters and Importers (ANEIR). "Our first request is for the future government to be professional. Secondly, we would want for it not to overdo it with social policies. If they do that, meaning if they overdo it with social policies without helping the economy, then I don't see a solid future for this country. The third thing that we are asking for is: «Show some love to Romanian capital!»".  Mihai Ionescu warned that this year, the export growth rate is slower than the growth rate of the GDP. Also, this is the first time when Romanian exports outside the EU are dropping, he added. Another great discontent of the exporters is the elimination of the Foreign Trade Department of the Ministry of the Economy, according to the president of the ANEIR, who stated: "We are disappointed in the fact that the team in the Ministry of the Economy has succeeded in destructuring the Foreign Trade Department. We had a structure that was exclusively in charge of foreign trade. Some people thought we didn't need a department for that. That is not true! The existence of that department is very important. But that is how the technocrats saw fit to help exporters - they have dismantled that structure and they have frozen all departures of those nominated for those positions in the respective embassies. We used to have that kind of representatives in our embassies. This year only a few people went abroad to take those positions and they did so temporarily. Half of Romania's foreign network no longer exists. I am not saying they were geniuses, but we could rely on them. Good or bad, they were there and many of them were useful". Mihai Ionescu also mentioned the fact that the Ministry of the Economy has blocked the promotion of exports, despite the fact that a lot of money has been allocated from the state budget this year. "We have not even achieved half of the program for the promotion of exports planned in the beginning of this year". In this context, businesspeople are going to sue the representatives of the government who are guilty of the things mentioned above, like Mr. Ionescu, who mentioned: "We have decided, together with the representatives of the business sector: this government isn't going to go away just by handing over papers. We are going to take them to court, because they have to pay for what they have done and for what they haven't done. They are appointed and paid by us to help the economy. They are going to be taken to court, through criminal lawsuits, filed by the economic professional associations".

SIF Oltenia has announced that it has brought two lawsuits against Banca Comercială Română: "- a request to bring an action for annulment of the Decision of the Extraordinary General Meeting of BCR of November 23rd, 2016, which is the object of the case no. 45844/3/2016; - a request for intervention which is aimed at rejecting the request for authorization of the merger approved by the Extraordinary General Shareholder Meeting of BCR of November 23rd, 2016, which is the object of case no. 44243/3/2016 which will have the first hearing on January 17th, 2017. Defendants: BCR, BCR Real Estate Management SRL (REM) and Bucharest Financial Plazza SRL (BFP)". The merger between BCR, REM and BFP represents a necessary operational simplification, given the fact that BCR is a majority shareholder in both entities, as its holdings are near 100%, and the two companies conduct their commercial activities through BCR, according to bank officials, who gave us the following statement: "The activities of the two subsidiaries will be internalized, and the merger will have a significant contribution to simplifying the structure of the BCR group and corporate governance". Law no. 31/1990 of companies allows shareholders who did not vote in favor of a spinoff or merger decision to exit the company and to ask the company to buy their shares, in which case their shares will be evaluated by an independent evaluator.  SIF Oltenia is the only one of the SIFs that has remained a shareholder of BCR, with a stake of 6.3%, after the other SIFs made their exit in 2011, following deals with Erste Bank, the majority shareholder of the bank. SIF Oltenia values its stake in BCR at 439.05 million lei, according to the report of September 30, 2016. In its 2016 strategy, SIF Oltenia has announced that it is still willing to negotiate with investors interested in its BCR stake, in order to get an attractive offer. "In the event such a negotiation is completed, we will summon the General Shareholder Meeting in order to put the deal up for approval - according to art. 241 (1) of the law 297/2004 - that stake exceeds 20% of the total assets, less receivables", SIF Oltenia wrote, and added: "We need to remind that BCR has ended 2015 very profitably, meaning that the chances of selling this stake in good circumstances have seen a good evolution".  Bucharest Financial Plazza SRL owns the BCR building of Calea Victoriei (the former Bancorex headquarters). The office building has been inaugurated in 1997, is 83 high, has 18 floors and a surface of approximately 31,000 sqm. 

European Union council president, Donald Tusk, called on the authorities in Poland to respect the constitution as a standoff between the opposition and the ruling party continued.  Polish opposition leaders called for days of anti-government protests and pledged to keep blocking parliament’s main hall after being accused of trying to seize power illegally by a government they say has violated the constitution.   Several thousand people protested in Warsaw and other cities after police broke up a blockade of the parliament building in Warsaw in the early hours.   “Following yesterday’s events in parliament and on the streets of Warsaw … I appeal to those who have real power for respect and consideration of the people, constitutional principles and morals,” Tusk told a news conference in Poland’s western city of Wrocław....Protesters had blocked all exits from the parliament on Friday after the opposition said PiS politicians illegally passed the budget for next year by moving the vote outside of the main chamber of parliament.  The protest marked the biggest political standoff in years in EU member Poland and the sharpest escalation of the conflict between the opposition and the ruling Law and Justice (PiS) party since it came to power in October 2015.  The police attempted in the early hours of Saturday to remove protesters by grabbing them and pulling them aside, but stopped as new protesters arrived at the scene. The police also called on protesters blocking the parliament to disperse, saying on loudspeakers that they might otherwise use force

Forecasts made by investment banks such as Goldman Sachs, JP Morgan and Barclays Capital are only marginally better than flipping a coin, and if you hold on to their “hot picks” longer than a few months you will almost certainly lose money, according to new research. Intertrader, a spread betting firm, examined stock predictions from so-called (and highly paid) gurus at 16 investment banks, tracked them over the following 12 months and compared them to the returns on just putting your money into a savings account or a stock market index such as the S&P 500 on Wall Street. “Investment banks’ recommendations are only marginally better than a coin flip,” says Intertrader. “The banks we looked at only managed to predict the correct direction their hot picks would go 55% of the time. And that is actually the kindest we could be – holding their predictions for longer just meant worsening results.” Investors who bought and sold an investment bank recommendation within 30 days on average made a gain of just 0.8%. If they held it for 90 days, it moved to a loss of 1.48%, while over a year the average loss from buying an investment bank recommendation was 4.79%. “We found that if you put the money you would have invested in a 3% high-interest bank account instead, your returns would generally be higher,” says Intertrader, which has created a Gurudex index that analyses investment banks. The firm says the findings serve as a reminder of Warren Buffett’s words of advice on the value of stock market forecasters: “We have long felt that the only value of stock forecasters is to make fortune-tellers look good. Even now, Charlie [Munger] and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grownups who behave in the market like children.”

The FTSE 100 index of Britain’s biggest stock market-listed companies has enjoyed its strongest year since 2009, jumping from 6,137 at the start of the year to touch nearly 7,000 this week. Wall Street’s S&P 500 has hit record highs, with British investors gaining even more in sterling terms because of the fall in the currency. This has meant that some of the biggest funds popular with small investors – such as M&G’s £6.3bn Global Dividend – have made gains of nearly 40% over the past year. But not everyone has shared in the party. The single biggest fund in the UK, Standard Life’s £26.3bn Global Absolute Return Strategies, has managed to lose money when almost everyone else has been coining it. The fund is down 3.3% over the past 12 months, compared with the 17% gain made by UK index-tracking funds over the same period. Star fund manager Neil Woodford has also had a poor year, making just 2.7% over the past 12 months for investors in his popular £9.2bn equity income fund.  The prize for the best performance of any fund in the UK goes to the little-known JFM Gold, which has given investors a return of 128% over the past year. Unfortunately, it’s only a £20m minnow, so we took a look at the big funds instead. M&G Global Dividend performed best, rising 39.4%, while Fundsmith Equity was up 28.2%. Both are heavily invested in Wall Street-listed stocks, which have rocketed in sterling terms. For example, Microsoft (a big holding in both funds) was trading at $54.80 at the start of the year and was $63.14 this week – a rise of 15%. But in sterling terms that translated into £37.27 at the beginning of the year, and £49 now – a rise of 31%. While the post-Brexit plunge in sterling will make holidays more expensive for everyone in 2017, it has turbo-charged returns for pension and Isa holders with investments in big US companies.

At least nine people have been killed and many more injured, according to German police, after a truck ploughed into a Christmas market in Berlin in what is believed to have been a deliberate attack. A vehicle, a large black Scania articulated lorry, ran into the market outside the landmark Kaiser Wilhelm memorial church on Monday evening. German police said one person was found dead in the lorry, having died of injuries sustained in the crash, while a suspect was arrested about 100 metres away from the scene in the Tiergarten.  A witness told the Guardian that the truck ploughed into the market at speed. “It was not an accident. The truck was going 40mph. It was in the middle of a square, there are main roads either side, [where it could have come from]. But it showed no sign of slowing down,” said Emma Rushton.  She said it crashed into a stall only a few feet from where she and her friend were standing. “We heard a massive bang. About eight to 10 feet in front of us was where the lorry ploughed through. It ploughed through the stall where we bought our mulled wine.

“It ploughed through people and the wooden huts, it tore the lights down. Everything went dark, it was black and there was screaming. It was awful,” she said.